Defaulting on a merchant cash advance (MCA) is a stressful experience, especially when a predatory lender makes threatening demands. If you are considering negotiation, what aspects can you include to build a payment schedule proposal that a lender cannot immediately dismiss?
Building a solid payment schedule
Negotiating a settlement with a tough MCA lender starts with presenting a payment proposal that shows your business reality and a clear path forward. Your proposal must be professional and backed by verifiable data. Among the aspects to include in it are the following:
- Financial documentation: You must show the lender three to six months of recent bank and credit card processing statements. This documentation can prove your current financial hardship and make your lower payment request seem reasonable.
- Realistic payment terms: A strong proposal includes a specific lower payment amount and a longer repayment timeline you can meet. You can propose a weekly or bi-weekly payment instead of the unsustainable daily deductions that are affecting your cash flow.
- Lump-sum option: The lender might be interested in a one-time payment to close the deal. Paying a lump sum may result in reducing the total payback amount.
- Waiver of future claims: Ask that the final settlement agreement includes a signed release from the lender, waiving all rights to sue you in the future. This can secure your business’s future and give you peace of mind after paying the settlement amount.
Additionally, the proposal must demonstrate that accepting your lower payment plan is a better move for the lender than spending time and money to pursue a lawsuit. It should also reflect your financial commitment that the lender can rely on.
Advocating for the most favorable resolution
The fight against an aggressive MCA lender can be daunting. Your business is a valuable asset, but navigating the MCA landscape should not cost you your future. By seeking legal counsel, you may better fight for the most favorable resolution to your MCA debt issue.